Don't Trip Yourself up While Buying a New Home

What's more fun than buying a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes can be a mistake. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's also a red flag to make those huge purchases with cash. Lenders are examining your cash reserve when considering your loan.

Don't go on a job search. Your recent job history should show consistency. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before you qualify, your loan process could fail or be bogged down.

Don't take your accounts to a new bank or move around your money. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other accounts) will be reviewed as the lender makes decisions regarding your approval. The lender needs to see a steady rise and fall of your funds over the pay period, in order to avoid fraud. No matter the reason, moving banks or transferring funds can raise a red flag with the lender and slow your application process.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your earnest money is yours, not the seller's until the deal closes. Although some FSBO sellers might not realize this, any good faith funds should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. Should your sale fall through, your contract with the seller should indicate where your good faith funds should go.

Amity Mortgage LLC can answer questions about these "Don'ts" and many others. Call us at 2037296681.